Music Streaming Subscriptions & Film/TV Synchs Continue Strong – Billboard

If you happen to’re in search of development within the U.S. recorded music business, there are two clear brilliant spots within the maturing streaming market. However they every include caveats and concerns.

From the appears to be like of the RIAA’s midyear report, launched Monday (Sept. 18), music subscription companies and synchronization royalties — two of the largest drivers of U.S. recorded music’s positive aspects within the first half of 2023, based on the RIAA — ought to proceed going robust by means of the tip of the 12 months.

For subscriptions, income elevated 12.4% to $4.97 billion over the primary six months of the 12 months and accounted for 84% of the business’s $710-million year-over-year enchancment. The variety of subscribers grew at a slower charge, although — 6.4% to 95.8 million — which suggests a saturated market the place new subscribers have gotten more durable to search out. (The RIAA offers the typical variety of subscribers throughout the six-month interval, not the quantity on the ultimate day of the interval.) The truth that income outgrew subscribers reveals that streaming firms are actually discovering development by means of worth will increase as an alternative. In 2022 and early 2023, Apple Music and Amazon Music raised costs on particular person and household plans. Over that very same time, the typical income per subscriber monthly elevated from $8.19 within the first half of 2022 to $8.65 within the second half of 2023, based on the RIAA’s numbers.

Streaming income’s resilience amid worth will increase “really underscores the purpose that music continues to be essentially the most under-monetized type of leisure,” says Golnar Khosrowshahi, CEO of Reservoir Media, “and may definitely stand up to a worth enhance construction that has some rhythm to it.” Proper on cue, Deezer added to a gradual drumbeat of pricing updates when it introduced on Thursday (Sept. 21) a second worth enhance in France, the UK, Spain, Italy and the Netherlands on high of hikes in 2022.

Spotify’s worth enhance — particular person plans up $1 to $10.99 monthly and household plans up $2 to $16.99 monthly — was introduced in July and may make stronger streaming revenues within the second half of the 12 months. Spotify beforehand acknowledged that its restricted worth will increase had not created a fabric quantity of buyer churn, and Deezer’s choice to once more elevate costs bolsters Khosrowshahi’s perception that buyers are in a position to stand up to barely larger costs with out canceling their subscriptions.

Revenues from synchronizations — when music is licensed for audio-visual works resembling commercials, motion pictures, TV reveals and video video games — grew 25.1% to $222.7 million and accounted for six% of the $710 million of whole income development. Synchronizations have been on a roll for the reason that pandemic helped create a growth in licensing alternatives. The newest mid-year enchancment follows a 29.9% achieve within the first half of 2022 and a 24.8% enchancment in calendar 12 months 2022.

The Writers Guild of America strike that started on Could 2 hasn’t damage synchronization revenues — but. “I’m inspired proper now,” says Tyler Bacon, president/CEO of Place Music. “My staff is busy.” So is Jedd Kantrancha, chief industrial officer of Downtown Music Publishing. Kantrancha says August was Downtown’s finest month for the variety of synchronizations of 2023 and its third-best month ever.

“One of many largest issues that I am seeing is simply increasingly more companions and folks within the house who’ve a music funds, who wish to study and wish to be educated about the best way to use music,” says Kantrancha. “I’m doing extra makes use of now with individuals who have not licensed music earlier than than I’ve in years. And I believe that that is undoubtedly one thing that pertains to the raise [in synchronization revenue] that you simply’re seeing. There are extra individuals on the market exploring the best way to license music.”

This kind of growth, nonetheless, will finally be hampered by the strikes — it’s only a matter of when.

Many consider the lag from the beginning of the strike — which reduces the variety of post-production alternatives to match music to movie and TV reveals — to a synchronization slowdown gained’t be felt till early 2024. Movie and TV studios have “lots of stuff within the pipeline” that may present synchronization alternatives by means of the tip of the 12 months regardless of the strike, says Kantrancha.

That gained’t decimate the sector, although. Even after a slowdown from the strike is finally felt, firms can shift their sources to different alternatives. “We’re extremely centered on promoting, and the strike doesn’t have an effect on that,” says Bacon. “Video video games, we’re very deep in, and the strike doesn’t have an effect on that.”